The African Development Bank Group (AfDB) has reported that its cumulative profit over the last 10 years totalled $2.5 billion, close to the $3.6 billion paid by shareholders for the 6th General Capital Increase in 2010, despite the disruptions of the Covid-19 pandemic to the global economic order in the past two and a half years.
The development finance institution attributed its impressive performance across key performance indices to financial reforms which had helped it become stronger, more resilient, and better equipped in the wake of the Covid-19 crisis.
Commenting on the bank’s financial health last Thursday while addressing the Bank Group’s shareholders, Executive Directors, and partner agencies at the organization’s 2022 Annual Meetings in Accra, the Acting Vice President for Finance and Chief Financial Officer, Hassatou N’sele, said the Bank Group achieved “very strong” financial results for 2021, achieving the third-highest amount of distributable income in the last 10 years.
Specifically, the CFO reported that the bank generated a cumulative profit of $2.5 billion in the past decade, close to the $3.6 billion paid by shareholders for the 6th General Capital Increase in 2010.
According to N’sele, “more than half of this benefit has been allocated to development on the continent. We are balancing development – development effectiveness – with the financial sustainability of the institution.”
The CFO further disclosed that 80% of the Bank’s business was sovereign lending, which is charged at zero profit margin, adding that the bank’s financial performance is anchored on loans to the private sector and the performance of its treasury portfolios.
Earlier in his address, the AfDB’s Senior Vice President, Bajabulile Swazi Tshabalala, said the institution strengthened its long-term financial sustainability framework over the last three years, ensuring that it built more resilience against future shocks.
He expatiated: “We updated our financial and risk policy; we undertook a review of our cost structure and are currently developing the Bank’s new cost containment framework to optimize the resources available for fulfilling our mandate.”
The Senior Vice President said the development finance institution had also revised its strategies and policies to enhance private sector development in low-income and transition states on climate change and green growth, governance, and debt management.
The annual meeting’s presentation featured a Davos-style panel of the Bank Group’s vice presidents, who provided insight into the institution’s performance in meeting its financial and development mandates. Simon Mizrahi, Director of the Development Impact and Results Department, moderated the session.
At the same event, the AfDB, which is the only Africa-based multilateral finance institution with a triple-A rating, also launched its 2022 Annual Development Effectiveness Review.
The report, which analyses the Bank’s role in Africa’s development, found that the Bank Group was pivotal in delivering timely investments that are helping millions of Africans overcome the unprecedented challenges caused by the Covid-19 pandemic.
